Saturday, October 23, 2010

Transport: Major step towards the creation of a long-awaited pan-Asian railroad

Store owner in Takeo, south of Phnom Penh | Credit: ADB - Ariel Javellana

By Taro Ichikawa

Republished courtesy IDN-InDepthNews Asia-Pacific Desk

TOKYO (IDN) - A major step towards the creation of a long-awaited pan-Asian railroad has been taken with the official opening in Cambodia of the first segment of a new international standard railroad.

"We are on the cusp of a contiguous Iron Silk Road stretching from Singapore to Scotland," says Kunio Senga, Director General of Asian Development Bank's Southeast Asia Department on October 22. "This possibility has been talked about for decades, but today the dream has finally taken a big step toward becoming reality."

According to ADB, freight rail service has commenced along a 120 kilometre (75 miles) stretch of rail between Phnom Penh and Touk Meas, near the Vietnamese border. The entire rail line is scheduled to be operational by 2013.

The railway rehabilitation project is a vital component of the Greater Mekong Subregion's southern economic corridor -- linking Thailand, Cambodia and Viet Nam -- and is a key component of ASEAN's Singapore-Kunming Rail Link Project.

Once Cambodia's new railroad is finished, only one remaining link, between Phnom Penh and Ho Chi Minh City, Viet Nam, will remain before a pan-Asian railway is complete.

Cambodia and Viet Nam have already signed an agreement to link their railways, and the People's Republic of China is supporting a design study on a rail link from Phnom Penh to Loc Ninh, Viet Nam.

"This new railroad represents another important step for Cambodia in overcoming its legacy of conflict," Senga points out. "With better infrastructure and closer economic ties with its neighbours, Cambodia's people are enjoying a peace dividend more than ever before."

Decades of conflict have left Cambodia's railroad in serious disrepair, with rail traffic slowly declining to a trickle. In some parts of the country homemade lorries -- simple, makeshift bamboo platforms powered by water-pump motors -- are the main form of rail transport along the antiquated tracks.

Cambodia's less developed transportation network and the country's higher transportation costs result in higher prices for imported and locally made goods compared to neighbouring countries.

Against this backdrop, the new railway will help lower the cost of staple commodities that poor Cambodian families rely on for sustenance.

The project is being funded, among others, by the Manila-based Asian Development Bank (ADB) and the Government of Australia.

ADB is providing US$84 million for the reconstruction and repair of 650 kilometres (404 miles) of rail stretching from Cambodia's border with Thailand, through the capital city of Phnom Penh, and southward to Sihanoukville, the country's main seaport.

The Government of Australia is providing an additional US$21.5 million in support of the US$141 million project. Other co-financiers of the rail project include the OPEC Fund for International Development (US$13 million) and Government of Malaysia (US$2.8 million grant in kind).

The Government of Cambodia is providing US$20.3 million towards the rail project. Toll Holdings, an Australian company, has been awarded a 30-year contract to operate and maintain the rehabilitated railway system.


ADB is also helping Cambodia improve rural roads, address safety and climate concerns. A loan of US$35 million equivalent for the Rural Roads Improvement Project will be used to help pave over 500 kilometres of roads in seven provinces located mostly around the Tonle Sap Basin, where a large number of the country's rural poor live.

According to ADB, co-financing is being provided by Korea Eximbank, owned by the Government of Korea, and the Nordic Development Fund, which is supporting climate change adaptation measures.

"This initiative will provide reliable all-year road access from provincial towns and agricultural rural areas to markets, employment centres and social services, benefiting about 560,000 people," according to Shihiru Date, Senior Transport Specialist in ADB’s Southeast Asia Department.

Cambodia, with support from development partners, including ADB, has been steadily building or upgrading its roads since the early 1990s, following years of conflict, with about a quarter of its total national and provincial road network now paved.

However, in recent years rural roads have been deteriorating because of a steady rise in traffic, a lack of maintenance funds, weak management capacity, design deficiencies and other problems.

Overloading of cargo trucks has become a serious problem, while the country has the unenviable reputation of having one of the highest incidences of road accidents in the world.

To address these issues, the project will provide community-based road safety awareness programmes, and training and capacity building support for staff and agencies engaged in planning, managing and maintaining the roads.

In view of Cambodia's vulnerability to floods and other severe weather-related events, climate change, adaptation measures are also included, such as mapping, and planning systems to evaluate threats, and to improve flood and drought management.

The project will also aim to develop pilot programs for early warning and emergency management planning systems, as well as water capture and storage systems to cope with an expected increase in floods and droughts, ADB media release informs.

What is more, the project has a strong labour and gender mainstreaming plan which will ensure that local residents get priority for road construction work, and that men and women receive equal pay for equal work.

"With paved rural roads and improved access to social services, girls will have a better chance of attending secondary school, markets will be easier to reach, 'buy and sell' opportunities for women will increase, and it will also be safer for women and girls to travel further from home," said Date.

ADB's loan, from its concessional Asian Development Fund will make up about 52 percent of the total project cost of US$67 million. It will have a 32-year term, including an eight-year grace period carrying a 1 percent per annum interest charge, rising to 1.5 percent a year for the balance of the term. Korea Eximbank is extending a US$19.35 million loan to finance civil works and consulting costs, the Nordic Development Fund is providing a US$5.4 million grant, and the Government of Cambodia is supplying the remaining US$7.25 million.

The Ministry of Rural Development is the executing agency for the project, which is due for completion in December 2015.

As of December 31, 2009, Cambodia had received US$1.07 billion for 50 loans (38 project loans and 12 programme loans), US$190 million for 13 Asian Development Fund grants (12 project grants and one programme grant), and US$107 million for 158 technical assistance projects since joining ADB in 1966. The majority of the assistance has been provided since operations in Cambodia resumed in 1992.

The Cambodia Country Strategy and Program (CSP) 2005–2009 focuses on broad-based economic growth, inclusive social development, and good governance. In addition, the CSP has a geographical focus on the Tonle Sap Basin, one of the poorest, most environmentally sensitive regions of Cambodia, and promotes synergies with the Greater Mekong Subregion (GMS) Programme. (IDN-InDepthNews/22.10.2010)